On the back of the latest round of Feed-in Tariff cuts, we take a look at the continent’s complex relationship with subsidies and consider if the industry can survive without governmental assistance – and where we can all find hope…
The last 12 months could well be described as solar’s year of living dangerously. Our decade of boom slammed into a bust global economy and, tellingly, the subsidies that are so vital to our industry were the first to go.
Germany, Italy and France have all cut subsidies this past year, while Spain has undergone major reductions in recent years as well. This has led to negative external ramifications, which have clouded the overall market. Of course, many companies with predominantly regional sales focused on Italy and France have closed up, while falling solar panel prices world-wide due to oversupply have led to the demise of many manufacturing based operations.
However, solar PV installations in Germany are not expected to decline sharply from 2011 levels, since falling module prices globally will likely offset the lack of government incentives, lifting capacity levels above 6GW for 2012, according to several analyst firms. And while Germany is anticipated to retain its top position in total solar PV installations, China is closing in on the number two spot for the year.
The unpredictable cuts to Europe’s feed-in tariff schemes threaten the recession-hit renewable sector with disaster, the head of the solar industry’s business association told EU policy site, EurActiv. An economic slowdown worsened by strong global competition has increased reluctance among banks to lend to solar energy firms. And that in turn could spell calamity if investor uncertainty over the future pricing of solar electricity was factored in, said Reinhold Buttgereit, secretary-general of the European Photovoltaic Industry Association.
